This column first appeared in the San Antonio Express News on November 10, 2015.
Dear Mr. Premack: I am single and live in my home in McAllen part of the year and part of the year I live in my home in Pennsylvania. I do business in both states and have accounts in both states. I consider myself a resident of both states. I have a Pennsylvania driver’s license and PA estate planning documents, but as I walk this timeline of life, I am wondering about using them. It will be no problem when I am in PA. But will my PA documents be accepted by TX doctors? hospitals? Will my Will need probated in both states when I pass away? M.F.
Each US state has its own distinct laws relating to Wills, Trusts, Durable Powers of Attorney and Advance Medical Directives. The first issue that must often be answered is: where is your legal residency situated?
Legal residency depends on a number of factors: Where do you own a house? In which state are you registered to vote? Which state issued your driver’s license? Where do you receive your mail? In what state is your car registered and licensed? And where do you intend your residency to be situated? No single factor determines residency; rather, the overall effect of your choices and intent must be considered.
Residency matters when it is time for probate of your Will. Legally, your Will must be probated in the state and county in which you have legal residency. If your primary residence is Pennsylvania, then your Executor would probate it there. That probate can handle many of the issues, like bank or brokerage accounts wherever located. But it may not be able to handle real estate issues in both states.
Texas law, for instance, does not authorize a Texas Executor to handle real property in any other state. If Texas was your primary state (yet you die owning a home in Pennsylvania) then your Will may have to go through an “ancillary probate” in Pennsylvania. The opposite is very likely true under Pennsylvania law. When a Will has been probated already in one state, and then is offered in a second state, the second state calls it a “foreign Will” and has specific laws for the process.
If you want to avoid the complexities of two probates, consider establishing a Living Trust. You could base it in either state. You would then deed your real estate from both states to the Living Trust, which becomes owner of the realty in both states. Eventually when you die, there is no need to probate your Will in either state, because you don’t own the houses, the Trust does. Trusts work very well across state lines and do not rely on your residency in the same manner as do Wills.
Just as Wills offer difficulties across state lines, so do Durable Powers of Attorney. Each state has very specific legal requirements for a valid Durable Power of Attorney. Frequently, an institution (like a bank) will be very reluctant to accept a Durable Power of Attorney created under the laws of a state in which that institution does not do business. A local Texas bank may be very reluctant to accept a Durable Power of Attorney that was created under Pennsylvania law.
Fortunately, there are options. First, you are allowed to have more than one Durable Power of Attorney. Keep the one you already made in Pennsylvania. Go to your Texas estate planning specialist and obtain a Texas Durable Power of Attorney. Be careful to include that the new one does not replace or revoke the old one, that they act in tandem. Second, you can use the same Trust that owns your real estate to own your bank accounts. If so, the Trustee can access the accounts without resorting to use of a Durable Power of Attorney.
Finally, Advance Medical Directives. Happily, these do tend to travel well across state lines. Texas, for instance, grants reciprocity to Advance Medical Directives that were made in other states. I do not know if Pennsylvania is so generous, but it does not affect you either way. However, you do want to be sure that your Advance Medical Directives (like your Directive to Physicians and your Medical Power of Attorney) are up-to-date under your state’s laws, properly identify the Agents who will make your decisions, and are available to those Agents in case of emergency.
Paul Premack is a Certified Elder Law Attorney with offices in San Antonio and Seattle, handling Wills and Trusts, Probate, and Business Entity issues. View past legal columns or submit free questions on legal issues via www.TexasEstateandProbate.com or www.Premack.com.